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One of my favorite blogs is called wandering earl. He's living frugally, traveling the world - doing everything I wish I had done in my 30's. And he's figured out a way to make an income out of it, too.
romanigypsy YOU UNlike the OP won't say HOW he gets his passive income. You WORK for your income. That's a big difference from someone who is instead choosing not to work perhaps by getting gov help when they COULD be working.
Mathjak, your letting eddie consume valuable time of your life you'll never get back. I'm done responding to anything he has to say. Others maybe, not him. It's pointless. But, god bless you, you keep trying. Unless he's willing to say how he gets his income I don't think you'll get anywhere with him.
I'm not sure why it is important that we know how EH makes his money. He said it is legal. I'm going to assume it is. EH could potentially have some type of original or semi-original idea or has found a niche in the market. My experience has been when you have an original idea, others take them and try to profit. I may be wrong, but why not give him the benefit of the doubt.
You just said things can work out on paper then totally fall apart...
Seems to me even the best "good planning" can fall apart. Imagine having a child with some rare form of cancer that requires one parent to quit work and fly to doctors around the country. After 5-10 years of this, a middle class family with the best "good palnning" can have all that go out the window.
This is why you pray.
well i will put it to you this way. if i was buiding a house i would build my house to withstand the likes of hurricane sandy since i live in nyc.
those construction standards would also be able to withstand anything we had to date. that does not mean a greater storm can't happen but at least i am starting out with the odds on my side.
that is what good retirement planning is all about regardless of age.
it is based on the work of bill bengen, the trinity study, bill bernstein and michael kitces and dr wade pfau to name but a few.
at least when you pull the plug and go off on your own in to retirement land you have a plan to start with that already withstood every thing thrown at us over every rolling 30 year period the last 146 years.
there are financial calculators like FIRECALC that incorporate these studies.
you are going in by the seat of your pants , a bunch of scribbled numbers and no clear picture of any of your future expenses .
you are going in not for 30 years like a retiree , you are trying to do this for 70-80 years.
if you ask us what we think which you did by posting here then don't fight our opinions when we give them.
- $20,000/yr passive income (increasing with inflation)
- modest home paid off (1000-1500sq ft)
- fuel efficient car paid off
- no debt
- low cost of living part of the US
With an income of $20k/year, health insurance can be had for free (Obamacare).
A modestly sized home of say 1000 sq ft (not small in most countries or even the US 40+ yrs ago) will allow for low utility cost, low property tax and lower maintenance cost.
If a person locates near a decent sized city (50k+) they may even be able to walk/bike/use public transportation.
Here is my personal expenses:
Rent $0
car payment $0 (for the next 7-8 years)
Food $325/month (includes eating out a lot)
Utilities $225/month (includes required $50 cable tv package)
Gasoline $60/month
Cell with unlimited data $40/month
Gym $20/month
Car insurance $60/month
Property tax $67/month
Health insurance $38/month (could get a bronze plan for $0)
home insurance $50/month
clothes/haircuts $30/month
home/car maintenance $??/month
travel/vacations ??
total: $915/month -- as low as $850 if needed.
That's about $11k/year which gives me a cushion of about $9k/year. I also have savings which can be tapped in an emergency.
I don't like work, schedules, mornings, bosses, responsibility, feeling replaceable, consumerism, etc, etc.
I do like coming and going as I please, sleeping until noon, hanging out at the pool, traveling, women, reading BS on the internet, playing basketball, working with my hands once in a while, etc.
Anyone else want to join me?
You like to date and that can get expensive, not including gifts for birthdays and Christmas. Traveling costs a lot and can use up what saving you have quickly. It is only a matter of time before you will either need to get a new/used car or have major repairs on the one you have. What happens when your home needs a new roof, or something major?
romanigypsy YOU UNlike the OP won't say HOW he gets his passive income. You WORK for your income. That's a big difference from someone who is instead choosing not to work perhaps by getting gov help when they COULD be working.
There's nothing wrong with passive income except for how it's frequently unreliable. For example, I had some rental properties for a while. I did the calculations and figured on how much money I should get every month. I have this many tenants, paying this much total in rent, I have this much in expenses, this will be my profit.
Then rent collection time came around, and one guy tells me that he just lost his job and can't pay his rent (between puffs on the cigarette he obviously found money to buy). Another guy moves out in the middle of the night. Now suddenly my expected income drops by several hundred dollars while my expenses remain the same. Essentially, I came to discover that my financial future was dependent upon the sense of decency possessed by my renters. That's a terribly unwise bet for anyone to make. See, the expenses were always my responsibility and I actually had something to lose by not making those payments. The tenants' rent payments that were supposed to cover the expenses came if they felt like making the payments. They knew the laws were on their side. They'd spend their money on everything else first (cigarettes, beer, sometimes drugs, trips to the club, etc) and then if there was enough left over, they'd pay the rent. I recently read an article that showed delinquency rates on certain types of bills... car loans were lowest (meaning people really value their cars, so they do their best to make their car payments) but mortgage loans were highest (the hypothesis being that people know they can't be kicked out of their houses anytime soon if they don't make the mortgage payment, so that's the one they will skip if one must be skipped). It's counterintuitive that people would intentionally skip their payment on their HOME, but when you consider the laws, it makes sense. Skip the car payment and the repo man will visit you very soon. Skip the trip to the tobacco store and your body will immediately go into the pains of withdrawal. Skip the rent payment... well, the landlord first has to give you an eviction notice, then go to court for a real eviction notice, then y'all go to court together two weeks later, then you still get another week to leave, then the landlord has to hire the constable to kick you out... it takes at least a month. Delayed punishment, for sure.
Honestly, I say it's easy enough to live on $20,000 per year if you're only one person. My wife and I could do it as two people, if we were willing to skimp on "entertainment". How hard could it be to make it work on $1,667 per month?
Food: $500 (and on that, two people eat very well)
Phone & Internet: $100 (assuming you need such)
House payment: $350
Car insurance: $40
Utilities (natural gas, water, sewer, electricity): $200
Gasoline: $100 (it could be zero if you never drive)
By now we're at $1290 per month in fixed expenses... and this assumes a house that isn't paid off! ("Where can you get a decent house for a $350/month payment?" I'm not telling... at least not until we close on ours. Then maybe I'll tell y'all, so that you can flood the market and cause the value of my property to boom!) The remaining $377 per month can be used for whatever. (Two people don't pay much tax on $20K per year... maybe O-bummer-care won't cover ALL of your health care costs... maybe you tithe to your church...) You can easily double your "whatever" money if you don't drive, and if you don't eat as much as my wife and I do.
Many people who believe they need more than that to live are not prioritizing expenditures properly. A luxury car with a $600/month payment is not a need, it's a want. My grandmother raised SEVEN children in a small 2-bedroom bungalow house. Your 2,400 square foot house is not a need, it's a want. Your gym membership is not a need - it's a desire that stems from your otherwise lazy lifestyle coupled with your refusal to moderate your food intake. Eat healthy and find a way to incorporate exercise into your daily life, and you won't have any problems. Eating out, going to the movies, concert tickets, cable TV, etc. are not needs - they're wants. Cook your own food. Play a board game. Play musical instruments yourselves (or play the CDs you already have). You want to watch TV? Surely you have either DVDs, tapes, or an antenna which will enable you to get television-based entertainment which does not spawn a monthly bill.
My wife and I have learned a good bit about living on very little, touring in a motorhome. We got a campsite every 4-5 days on average... the other days, we didn't want to use electricity any more than we had to because doing so meant running the generator. You think YOUR electricity is expensive? Running our generator made our electricity cost approximately $2.00 per kilowatt hour. We didn't have cable except for one or two times, at campsites. When we would have been bored otherwise, here's what we did:
-I wrote music. I came up with some pretty good songs, in my opinion!
-My wife learned how to crochet... and then mastered the craft. In just a few months, she's gotten so good that she has acquired paying clients!
-We played games together... mostly brain-based board games like chess and Scrabble.
-We (okay, mostly my wife) experimented with cooking different types of food.
-We talked a lot, spent a lot of time together, and bonded over sharing our lives in practice as well as on paper.
-We did spend a lot of time on the Internet, but for me there was a lot of research in there. I have enriched my mind greatly.
-We spent time with family. It's easy enough to plan our tour route so that it comes close to our families, enabling us to see them for as long as we all choose, without wrecking our income source.
Living life as modern gypsies has its disadvantages but our near-future plan includes being able to do this same touring life in smaller bursts during the better weather. When we close on our house, we still won't be getting cable, gym memberships, etc... we'll be drastically reducing our cell phone and Internet bills also. I'm looking forward to having a house not so I can sit around and change channels all day, but so that my wife and I have a place to call OUR HOME... our place where we can develop our lives together. So many couples spend their lives making money that their homes are little more than the place where they crumple in a heap, exhausted, at the end of every work day. I don't find that preferable to a simple life on $20,000 per year wherein a married couple can actually live a life of togetherness.
If Eddie is single, and doesn't want to be married, he'll do just fine on $20,000 per year... if it is in any way reliable.
It seems to me that planning a life around working 40 plus hours, 50 weeks a year is quite a bore, too. Even if you have a great job (which most people don't), you're gonna get tired of it sooner or later.
Enjoyable and interesting thread! It is fortunate to be able to think through possibilities, with real live people who are living according to different precepts!
Ellise, respectfully, I can say from personal experience that very few of us anymore will have an opportunity to get tired of our jobs.
Since the Great Recession, anymore, it seems as if a year or two is a long tenure in many areas of the country. I've been following the story of the impact of the Great Recession on the middle class from reading every reputable investigative journalist I can find. Anymore, the pattern seems to be - reach 50 (40 in some areas, such as in the Northeast); get laid off; scramble to find something else for six months to a year; rejoice in patching together a couple of part time 'survival jobs'; finally land a job in your field similar to what you were doing before, at a 20% pay cut; land in the next round of downsizings a year or two later; lather, rinse, repeat. It's truly scary.
For that reason, I have come to the conclusion that the OP has a good response to the malaise of our age, a long term economic decline. Pare your "needs" so that you are resilient in the face of adversity, and can withstand the 'slings and arrows of outrageous fortune'. The only thing he's really vulnerable to is hyperinflation, and I'm sure he'll have developed some barter skills by then.
Ellise and Eddie, you two are my new role models!
(Spoken as a professional with a good job in a prosperous area, but you always have to have a Plan B).
You like to date and that can get expensive, not including gifts for birthdays and Christmas. Traveling costs a lot and can use up what saving you have quickly. It is only a matter of time before you will either need to get a new/used car or have major repairs on the one you have. What happens when your home needs a new roof, or something major?
Major repairs come from savings. I just put a new roof that cost me $3k - should be good for another 25-30 yrs on that front. Living my lifestyle, it's best to drive cars for 15+ years. If you are prepared for possible repairs, there is no reason a modern car can't last 20+ years. Look at all the 1992-1996 Hondas and Toyotas you see on the road. One of my aunts has a '94 Corolla that she bought new in '94 and is still driving today - it has about 350k miles.
Enjoyable and interesting thread! It is fortunate to be able to think through possibilities, with real live people who are living according to different precepts!
Ellise, respectfully, I can say from personal experience that very few of us anymore will have an opportunity to get tired of our jobs.
Since the Great Recession, anymore, it seems as if a year or two is a long tenure in many areas of the country. I've been following the story of the impact of the Great Recession on the middle class from reading every reputable investigative journalist I can find. Anymore, the pattern seems to be - reach 50 (40 in some areas, such as in the Northeast); get laid off; scramble to find something else for six months to a year; rejoice in patching together a couple of part time 'survival jobs'; finally land a job in your field similar to what you were doing before, at a 20% pay cut; land in the next round of downsizings a year or two later; lather, rinse, repeat. It's truly scary.
For that reason, I have come to the conclusion that the OP has a good response to the malaise of our age, a long term economic decline. Pare your "needs" so that you are resilient in the face of adversity, and can withstand the 'slings and arrows of outrageous fortune'. The only thing he's really vulnerable to is hyperinflation, and I'm sure he'll have developed some barter skills by then.
Ellise and Eddie, you two are my new role models!
(Spoken as a professional with a good job in a prosperous area, but you always have to have a Plan B).
Thank you (I'm blushing). I guess I've always had a tendency to manage my finances for a rainy day, even when it's been sunny. People have gotten too comfortable with the idea of taking on large debt lately, and for most that doesn't seem to have changed even after what happened in 2008.
Food: $500 (and on that, two people eat very well)
Phone & Internet: $100 (assuming you need such)
House payment: $350
Car insurance: $40
Utilities (natural gas, water, sewer, electricity): $200
Gasoline: $100 (it could be zero if you never drive)
Health insurance and out-of-pocket costs?
Property tax, home insurance, and maintenance/repairs/cleaning/lawncare?
Vehicle depreciation and services?
Household supplies and pharmaceuticals?
Travel?
If I could get those things for free I'm sure I could stop working much sooner too!
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